This is the tale of someone -me- who decided to go for a risky "investment" while it has avoided them for most of its crypto-life.
I had certain amount of bitcoin accumulating dust. I had earned them working for a certain well known company from the crypto-sphere. It happened that I had also attracted a relative to get into this wonderful world of freedom.
Being that person younger than me, it liked to be more risky, and was very often asking me about projects from the "DeFi" world.
My first adventure on DeFi
I then did some research and advised to get in or to run away from it. It also happened that in a few of those projects -all of them very well known, Nexo as an example- we both get in. In the case of Nexo, I knew it from a time before, I liked their dividends program, although I never get in at the time.
I am of the kind of person which likes to know where is putting its money. Not a deep knowledge, but at least know from where I will be getting my profits.
In the case of Nexo, for example, my money is lended by the platform to other people. Nexo makes some profit from this like a bank. It lends my money for a greater interest than what needs to pay me for it. Quite simple. Like I said, it works like a traditional bank, but with crypto-assets instead of trash-money.
Bitten by DeFi's bug
Meanwhile, I decided to stake the money on Stellar. I don't like fiat money, but just in case everything goes to dust, at least I would have some money in the form of a stablecoin. After some time, I staked it to get some rewards.
Then, I was asked about Terra and Anchor UST. At first, I liked it. Over there you can find assets representing shares of some well known business. I won't tell you which ones, as I don't want to risk vomiting after pronouncing every name.
While watching some videos on Odysee, I watched one which was claiming Terra UST could be a ponzi scheme. As I know that my relative was thinking about putting a very big amount there, I run to ask to don¡t do it. Luckily I was able to warn him on time.
Finally, I suggested to put the money on Waves USDT. I was a holder during the previous boom of the Bitcoin and Waves was one of the cryptocurrencies I liked the most. Long time after selling my WAVE tokens, I learned about the way transactions are confirmed -really fast, sometimes even instantly, as Waves blockchain blocks are relayed while they are still being built-.
I staked certain amount of EURN -which had to be bought with USDN- before the weekend. And then, on Monday, BOOM. USDN token lost its peg with USD -right now it is being exchanged for about 0.9 USD, but it has gone to 0.6 USD-.
Again, I warned my relative about it, and luckily I am also being early about it. I don't want anyone to loose money because of an advise given by myself.
While trying to avoid a risk which was unconfirmed, I felt into another one which I could totally had avoided, as some users of a social media platform had already alerted people. One of them even with transactions which seems are a proof about Waves development team increasing Waves price to be able to keep minting more USDN tokens.
I recognize that I fell into the trap. I didn't understand the way Neutrino works -and I am still not being able to- and I shouldn't put a single cent over there.
And all of this has made me rethink about the cryptosphere.
Staking of native token is for holders. Everything else is for greedy people
Proof-of-stake distributes tokens to holders. Those tokens are new. And it doesn't matter how many holders are ready to stake. Nodes receive their newly minted tokens and then they distribute them. In Cardano, that process is hard-coded on the blockchain software. On Waves, nodes gets their rewards and then they decide who and how many will get a portion of it.
However, on these platforms which are offering you more than 5% or 10% something obscure is happening for them to be able to give a much higher percentage. Also interesting that the bigger percentage is always for staking stablecoins -or shitcoins also-. They are targeting greedy people and people not really interested in cryptocurrencies.
I just don't understand how they are able to give anything. What they are using my money for? In real world, such a big interest is suspicious, except of banks, where their business model is well known, in the case of deposits and loans.
At the end, I will most likely move my money to increase my current holdings of some proof-of-stake blockchain.
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